SENS

Good day everyone, welcome to the Senseonics second quarter 2026 earnings call. Later, you will have the opportunity to ask questions during the question-and-answer session. To register to ask a question at any time, please press star one on your telephone keypad. Please note, today's call will be recorded, I'll be standing by should you need any assistance. It is now my pleasure to turn the conference over to Jeremy Feffer from LifeSci Advisors. Please go ahead.

Thank you. This is Jeremy Feffer from LifeSci Advisors. Before we begin today, let me remind you that the company's remarks include forward-looking statements. These statements reflect management's expectations about future events, operating plans, regulatory matters, product enhancements, company performance, and other matters, speak only as of the date hereof. These forward-looking statements involve a number of risks and uncertainties. A list of the factors that could cause actual results to be materially different from those expressed or implied by any of these forward-looking statements is detailed under Risk Factors and elsewhere in our Annual Report on Form 10-K for the year ended December 31st, 2025, our 10-Q for the period ended June 30th, 2026, and our other reports filed with the SEC. These documents are available on the investor relations section of our website at www.senseonics.com.

We undertake no obligation to update publicly or revise these forward-looking statements for any reason except as required by law. Joining me today from Senseonics are Tim Goodnow, President and Chief Executive Officer, and Rick Sullivan, Chief Financial Officer. Brian Hansen, Chief Commercial Officer, and Mukul Jain, Chief Operating Officer, will also be available during the Q&A. I'll turn the call over to Tim.

Thanks, Jeremy, thank you all for joining us today. I have to say, this is an exciting call to be giving today because it's an outstanding quarter for Senseonics. We're redefining what a CGM can be for people with diabetes, the second quarter showed just how much momentum that mission is building. This was another strong quarter for Senseonics, we are once again raising our full year 2026 global net revenue guidance now to $62 million-$66 million from $60 million-$64 million, representing year-over-year growth of about 80%. I'll keep my remarks focused here, as a quarter like this deserves a moment to properly highlight it. Second quarter revenue grew approximately 120% year-over-year, with U.S. revenue growing more than 150% with strong performance in both the DTC and HCP channels.

We also completed the commercial transition of our business in Europe from Ascensia, effective June 1st and consistent with the timeline we gave you in May. I want to thank the team led by Brian Hansen, our Chief Commercial Officer, for the continued execution of this strategy. At the same time, we continued to scale Eon Care ahead of schedule, enabling broader and faster access to Eversense for prescribing clinicians and their patients. In addition to the strong revenue performance, it's also important that I spend a moment on the margins because this is one of the most important stories for the quarter. Gross margin came in at 59%, above the guiding range we gave you in June, and the strongest organic performance by the company in its history. I want to give real credit to our commercial, manufacturing, and supply chain teams for that execution.

This kind of consistency does not happen by accident. Importantly, this quarter's margin doesn't include any one-time adjustments. This is a clean number, and I think that makes it an even stronger proof point. It's the second consecutive quarter that we've delivered margin at or near the high end of our range since bringing commercial operations fully in-house. That's exactly the kind of proof point that validates our decision we made to take control of our own commercialization in the first place. Given this performance, we are also raising our full year gross margin guidance to the range of 58%-61%, from the prior range of 55%-58%. Every point of margin we deliver today is a point that, over time, helps us fund our own operating expenses and moves us closer to being a business that can fund itself.

This is our clear objective, and that is the whole thesis behind the commercial transition. We now have all the pieces. We own the tactics and we own the strategies. Q2 showed another quarter of progress from the transition, and our team is delivering quarter after quarter. I couldn't be prouder of the execution. During Q2, we also presented additional real-world data on Eversense 365 at the ADA Scientific Sessions in June. The data reinforced compelling clinical benefit through strong adherence with real-world system use averaging 93% and consistent loop metrics across the first and second six months of sensor wear, including a mean time and range of 66% in open-loop use, with more than 81% of our users achieving their hypoglycemia targets. Among those on a partnered AID system, we saw a mean time and range of approximately 76%.

We also highlighted at the ADA the high-quality performance and survivability of Eversense for a full year, which we showed to be a meaningful differentiator in the quality aspects of our product compared to other available transcutaneous sensors, which clearly disappoint some of the users. We're pleased that the product continues to perform in the real world, which excites our users and meets their needs. We're at the most exciting stage of our journey yet, and this quarter is exactly the kind of proof point that demonstrates our strategy is working, bringing our commercial organization in-house, scaling Eon Care, driving Eversense 365 adoption, and developing the next generation of products to redefine CGM. Let me provide a bit more color on each of these areas before turning the call over to Rick. In the United States, our commercial momentum has continued to build, and frankly, it's exciting to watch.

We shipped more units in the second quarter than in any other quarter in our history. The number of active prescribers writing for Eversense reached an all-time high, up approximately 130% year-over-year. Direct-to-Consumer remains our largest source of new patient growth. At the same time, our healthcare provider channel continues to expand as our sales force gains productivity, awareness expands, and we are continuing to see strong results from the Eversense 365 integration with the twiist insulin pump. twiist's footprint is roughly 100 sales territories and has meaningfully amplified our own commercial reach, and we continue to see the combination bring new patients to both products. As we noted at our ADA analyst event, approximately 90% of our new patients continue to come from the installed base of existing CGM users switching to Eversense.

This speaks to the quality and differentiation of our sensor. Patient retention has also remained in line with our expectations. Simply put, our U.S. business is executing at a high level across every part of the model, performing consistent with a high-growth plan we've laid out, and we expect that strength to continue through the back half of the year. I also want to spend a few minutes on Eon because it has quickly become a strong asset for growth today. At its core, Eon makes Eversense easy to get. It gives patients simple, convenient, and affordable access to the sensor, and it partners with prescribers so they can bring the benefit of Eversense to their patients without having to build the insertion procedures into their own practice. That model matters because it means any prescriber, not just trained inserters, can say "yes" to Eversense.

The network's momentum in the second quarter was outstanding. We added 28 new providers, bringing us to more than 90 nurses, already well ahead of pace to deliver our goal of 100 by the end of 2026, and we have plans in place to push beyond that target. By year-end, we expect to have an Eon provider within 30 miles of 60% of the U.S. population. That reach is showing up directly in volume. Eon performed more insertions in the second quarter than in any other quarter in its history and June was the highest volume month ever. Today, Eon is performing approximately 40% of all Eversense insertions in the United States, and we expect to account for more than half by year-end. Eon aligns tightly with our Direct-to-Consumer strategy. Most patients who come to us through DTC channels have primary care prescribers who are not Eversense-trained inserters.

Eon closes that gap. It is what makes getting Eversense convenient and affordable for exactly those patients. While Eon's primary focus remains enabling sensor adoption, it is expected to become a contributor to Senseonics' economics in its own right. Simply put, Eon is a key element powering Eversense growth today, and it will be essential to the rapid acceleration and adoption we expect with Gemini and Freedom tomorrow. On the reimbursement side, our channel mix remains a real strength for us, holding constant at approximately 60% of our volume flowing through and the remaining 40% through our DME channel, in line with our expectations. We continue to expect this split to hold for the remainder of the year.

In Europe, we completed the commercial transition of the business from Ascensia during the second quarter, bringing over the full commercial organization, including all local employees, and standing up of our own dedicated sales force across Germany, Italy, Spain, and Sweden. That transition landed a little later in the quarter than we had originally planned, which slightly affected our tender-driven markets. In each of our tender countries, we need to both transfer ownership of the existing tender from Ascensia to Senseonics and simultaneously request the upgrade from our legacy 180-day Eversense E3 product to Eversense 365. Because the underlying commercial transition landed later in the quarter, that work in Italy and a handful of other markets got slightly pushed out as well.

That timing, together with a small purchase of Eversense inventory back from Ascensia as we finalized the transition, similar to adjustments we've made in the U.S. in the past, is why our OUS revenue came in slightly lower than we had modeled for the quarter. None of this changes our confidence in the opportunity in front of us in Europe. It's truly a matter of timing, and we expect the revenue associated with these tender updates to shift to the third and fourth quarter. We do not expect an impact on the full year revenue in Europe, but it will slightly push some of this revenue into Q3 and Q4. We continue to expect Europe to represent approximately 20% of our total revenue for the full year. Turning to our product pipeline, our additional major pillar for Senseonics' growth.

Both Gemini and Freedom continue to advance in line with our expectations, and I want to take a moment to remind everyone just how exciting this roadmap is. Our mission has always been to push the boundaries of sensing technology and make diabetes less visible. Both Gemini and Freedom are how we get there. Gemini is on track for the 510 submission to the agency in Q1 2027 and launch soon after its clearance. It will be the first CGM with an optional on-body transmitter, giving us two distinct products from a single platform: a flash style mode where patients can scan for a reading just using their smartphone, and a full continuous mode for patients who choose to keep the transmitter on.

Freedom is right behind it, and we're preparing to begin our first in-human study later this year, an important next step towards our vision of eliminating the on-body transmitter entirely. That timing is supported by encouraging results from a recent animal study that we shared at the ADA, where we saw 100% Bluetooth communication success within eight feet of the implant sensor and up to 83% with connections at 25 feet, giving us confidence in the antenna and protocol choices we've made as we move toward human testing. We remain incredibly excited about the progress that we've made on both Gemini and Freedom, and we continue to be on track to deliver the most revolutionary advancements in diabetes technology. Also advancing the platform in June, we announced a strategic partnership with Welldoc to develop the next-generation Eversense 365 app.

The new app will preserve everything patients rely on today while adding improved integration with tools like Apple Health and Google Health Connect, and it lays the groundwork for future AI-powered features leveraging Welldoc's healthcare-ready AI platform. We expect to launch the new app in the U.S. in the second half of this year, with European availability to follow in early 2027. All part of our mission to make it easier and more convenient for people to manage their diabetes. With that, I will now turn the call over to Rick to walk through our financial results.

Thanks, Tim, and thanks, everyone, for joining us this afternoon. I will keep my comments on our sales and reimbursement channels brief today, since the mechanics remain in line with what we have previously shared and touch on the headlines before moving into our results. I am happy to go deeper into any of it during Q&A. Direct-to-Consumer remains our largest U.S. sales channel, followed by our Healthcare Provider channel and patient re-orders, which continue to grow as our installed base matures. On reimbursement, as Tim just described, our bundled pay and DME mix held at approximately 60/40 this year, consistent with our expectations. Now let's turn to the financials for the quarter.

Net revenue for the second quarter was $14.5 million, an increase of approximately 120% compared to $6.6 million in the second quarter of 2025, driven by the continued Eversense 365 adoption in the U.S., the elimination of the Ascensia revenue share, and a favorable reimbursement mix. U.S. revenue was $12.6 million, up more than 150% from $4.9 million in the prior year period. Revenue outside the U.S. was $1.9 million, up approximately 12% from $1.7 million in the second quarter of 2025. A smaller increase than we would expect on a full-year basis, reflecting the slight delay in tender updates to the 365-day product in Europe as we finalize the transition that Tim described, which is purely a matter of timing and not demand.

As those tenders update, we would expect OUS revenue to accelerate in the third and fourth quarters, still landing at approximately 20% of full-year revenue. A big highlight for us in Q2 is our gross profit margin. Gross profit for the second quarter of 2026 was $8.6 million, representing a gross margin of approximately 59%. This is compared with gross profit of $3.1 million and a gross margin of approximately 47% for the second quarter of 2025. This reflects both the strong execution of our manufacturing and supply chain teams as we continue to increase lot sizes and make improvements throughout the manufacturing process, and the reimbursement mix with about 60% of the business continuing to flow through the bundled pay reimbursement channel with higher average selling prices.

Research and development expenses for the second quarter of 2026 were $11.6 million, compared with $7.7 million for the prior year period, an increase of $3.9 million, primarily driven by ongoing clinical trials for the Gemini product and development efforts for our Freedom product, making progress towards our vision of eliminating the on-body transmitter entirely. Selling general and administrative expenses for the second quarter of 2026 were $32.9 million, compared with $9.7 million for the prior year period. The increase is due to the transition of commercialization back to us from Ascensia and the assumed operational responsibilities related to the commercial integration in the U.S. and Europe. Included in these amounts are transition service agreement expenses paid to Ascensia, most of which were concluded by the end of the second quarter.

Net loss was $36.7 million, or $0.63 per share, compared to a net loss of $14.5 million, or $0.36 per share in the second quarter of 2025. As a reminder, as you've heard today, we are in a period of investment in Eversense commercialization and our next wave of CGM innovation. We believe those investments have clearly begun to pay dividends. We are taking a long-term view of the business. We believe our decisive actions so far this year are laying a strong foundation for a commercially and financially sustainable enterprise. As of June 30th, 2026, cash, restricted cash, and cash equivalents totaled $143 million, and debt and accrued interest was $55.5 million. I also want to take a moment to reemphasize the financing we completed earlier in the second quarter because it's a real strategic asset heading into the back half of the year.

In early May, we raised more than $100 million in growth capital in two steps: an equity offering of common stock and pre-funded warrants that generated approximately $90 million in net proceeds, led by a handful of institutional investors with strong conviction in the Eversense story. An amendment to our credit facility with Hercules Capital that expanded the facility from $100 million to $140 million, giving us access to an additional $20 million immediately, with up to $85 million more available over the next 18 months, subject to meeting certain conditions. On top of the cash balance I just described, I believe our balance sheet is well-positioned to support our commercial strategy and pipeline investments.

Given the strength we saw this quarter, as Tim highlighted, we are raising full year 2026 revenue guidance to $62 million-$66 million, up from our prior range of $60 million-$64 million. We are also raising our margin guidance and now expect our full-year gross margin to be in a range of 58%-61%. The momentum we are seeing through two quarters gives us confidence in these expectations. As in prior years, we expect revenue to be weighted toward the back half of 2026, with approximately 40% in the first half and 60% in the second half, a seasonal pattern that has historically held true independent of the European timing dynamics Tim described. We continue to expect operating expenses of $150 million-$160 million. Cash utilization of $110 million-$120 million for the year.

With that, I'll turn it back to Tim for a few closing remarks.

Thank you, Rick. To wrap up, I want to step back and frame where we stand because I think this was one of the strongest quarters in Senseonics history. Coming into the year, our thesis was that bringing the commercial organization fully in-house, combined with the strength of Eversense 365, would unlock durable revenue growth and margin expansion. So far, we see this thesis is playing out ahead of expectations. Our second quarter results give us confidence. Revenue up approximately 120% year-over-year. Margin performance at the high end of our guided range. Continued strength in the U.S. A European transition that is operationally complete, even as some of the associated revenue shifts later in the year. A meaningfully strengthened balance sheet and an Eon Care Network that is on track to scale beyond our 100-patient per stop.

An Eon Care Network that is on track to scale beyond our 100-provider goal, supporting maximizing our DTC strategy and opening up access across the U.S. We're not just growing the business, we're redefining what a CGM can be, and we believe this quarter is showing that. We remain confident in our plan for the year, and what we're seeing so far in 2026 gives us even more conviction. Thank you all for joining us today. With that, we'll now open up the line for questions.

Thank you. If you'd like to ask a question, press star one on your keypad. To leave the queue at any time, press star two. Once again, that is star one to ask a question. We'll take our first question from Joshua Jennings with TD Cowen. Your line is open.

Hi, Tim. Hi, Rick. Thanks for taking the question. This is Colin on for Josh. Congrats on the nice quarter as well.

Thanks, Colin. Thank you. How are you?

I'm great. How about yourself?

Doing well.

Can you talk about the drivers of the really strong U.S. new patient number, as well as how you're rolling out the expansion of the Eon Care Network, whether that be by filling some of the white space in any regions or growing your presence in different key areas?

Growth fundamentally is it's new patient starts, right? As we said, the approach, as you know, is through the DTC channel, which is about 60% of the growth, and the other 40% is coming from the HCPs. DTC, we've run a lot of commercials in social media. We're getting good response. We've increased the effectiveness of that, so taking the cost down, which allows us to get broader and broader reach, and through our internal procedures or their internal service teams, we're improving the conversion on each one of those. That's happening month-over-month, quarter-over-quarter. On the sales reps side, they're doing a great job at reaching out with folks as Eversense becomes more and more aware at each one of their clinics. They're able to go penetrate deeper as well.

Obviously, as we bring more folks in, especially with the DTC, they're able to go broader in the offices that they're able to call on. It's really just effectiveness of the entire commercial organization. Now that we have control of that, we're able to make all of the adjustments. We make the real-time, week-to-week adjustments in regards to what investments we want to make, in regards to what ZIP codes that we want to focus on. That's all directly within our control. Brian and his team are doing a great job at executing on all of those. Eon growth, as you've seen, we actually accelerated from what we said because we're just seeing great progress with that. It takes a relatively short amount of time period to bring new nurses up to do the procedure.

We do the training on it, we make sure that they're credentialed, and we're putting in the geographies where we're showing the success in the commercial aspects as well. It's really building on each other. As we show more commercial success, there's a greater need for inserters. Obviously, where we have greater insertion depth, we can push harder and harder with the commercial. It really is a rising tide is floating all the boats.

That sounds great. Thank you. Maybe with the E 365 reinsertion cycle coming up here in the back half, can you put that recurring revenue stream of sorts into perspective versus your new patient adoption expectations? Thank you.

Well, remember, we're certainly continuing to ramp on 365, but we've been reinserting 365 now since last November, so we've got a pretty good track record. It continues to hold exactly where we expect it would be. From a quantitation perspective, I don't know if we've broken that down yet, but it continues to be right on our plan.

Once again, if you would like to ask a question, please press star one on your keypad now. We'll move next to Anthony Petrone with Mizuho Group. Your line is open.

Congratulations on the solid quarter here. Maybe just a little bit on the complexion on the U.S. side. How much was just new territories opening up versus twiist integration? Then as you look ahead, how many new regions with the capital raise do you expect to turn on into the end of the year? Then I'll have a follow-up. Thanks.

Sure. Thanks, Anthony. We actually have not turned on any new regions after this capital raise. We have 43 regions that we are active in, and we continue to do that. We have increased some of the DTC in those regions, which was as we have planned. We're continuing to execute. As you may have heard us say, we've got 43 regions externally, and we've got about 55 or so people internally that do the conversions of those DTC efforts. We're very excited about the work that we're seeing and the progress that we're making with the twiist partnership. Clearly our penetration into Type 1 is improving. As a result of that, as you know, we were pretty much 80%-85% Type 2. We're seeing that moderate some, but still very much predominantly a Type 2-focused company at this point.

We do expect that'll change as we bring on other pump companies in the future.

Thanks. The follow-up will be just on Gemini study expected to be completed by the end of the year. Just wondering on timing for when we could actually see the Gemini data next year. Would it be at ADA of 2027? Thanks again. Congrats.

Hey, Anthony. This is Mukul. Yeah. That should be our expectation to see it by next summer. We will complete end of the year, submit Q1, and then a 510(k) submission, followed by the clearance, hopefully within a quarter of that.

Once more, if you would like to ask a question, that is star one. We'll pause another moment. Thank you. At this time, there are no further questions in queue. This brings us to the end of today's meeting. We appreciate your time and participation.

Good day everyone, welcome to Senseonics first quarter 2026 earnings call. At this time, all participants are in a listen-only mode. Later, you will have the opportunity to ask questions during the question-and-answer session. Please note, today's call will be recorded, and I'll be standing by should you need any assistance. It is now my pleasure to turn the conference over to Jeremy Feffer from LifeSci Advisors. Please go ahead.

Thank you. This is Jeremy Feffer from LifeSci Advisors. Before we begin today, let me remind you that the company's remarks include forward-looking statements. These statements reflect management's expectations about future events, operating plans, regulatory matters, product enhancements, company performance, and other matters, and speak only as of the date hereof. These forward-looking statements involve a number of risks and uncertainties. A list of the factors that could cause actual results to be materially different from those expressed or implied by any of these forward-looking statements is detailed under Risk Factors and elsewhere in our annual report on Form 10-K for the year ended December 31st, 2025, and our 10-Qs and our other reports filed with the SEC. These documents are available on the investor relations section of our website at www.senseonics.com.

We undertake no obligation to update publicly or revise these forward-looking statements for any reason except as required by law. Joining me today from Senseonics are Tim Goodnow, President and Chief Executive Officer, and Rick Sullivan, Chief Financial Officer. Brian Hansen, Chief Commercial Officer, will also be available during the Q&A. Now I'll turn the call over to Tim.

Thanks, Jeremy, and I appreciate everyone joining us today. 2026 is off to a very strong start for Senseonics, commercially and strategically. In the first quarter, we delivered $11.7 million in revenue and 58% gross margin. We view the combination of top-line growth and margin expansion as early validation that our integrated commercial model can deliver with improving financial performance as we scale. Given all of this, we are raising our full year 2026 global net revenue guidance to $60 million-$64 million from $58 million-$62 million, representing year-over-year growth of 70%-82%. Beyond the financial results, we successfully completed the integration of the U.S. commercial organization, continued progress towards completing the European commercial integration, launched our first AID partnership, advanced our Gemini and Freedom development programs, and added over $100 million in growth capital to our balance sheet.

Taken together, these accomplishments give Senseonics the commercial control, the product pipeline, and the financial resources to drive Eversense revenue growth. First, through our compelling Eversense 365 offering, and then through the next generation CGM system that we are developing. We're at an exciting stage of our journey, and the opportunity ahead for Senseonics is significant. There's a lot more work to do, but we are now in control of our destiny with the right team, structure, and strategy in place to accelerate our recent momentum. Now, I'd like to provide more detail on the encouraging progress so far this year. On the commercial side, execution was strong. The first quarter of 2026 was our first full quarter with direct ownership of the Eversense commercial organization in the U.S. following the January first transition from Ascensia Diabetes Care.

Having the commercial team inside Senseonics gives us the ability to align sales strategy, field execution, to market access priorities with our product development and our qualified manufacturing partners. This has been invaluable, and that alignment contributed to an exceptional financial quarter. In the quarter, we generated revenue of $11.7 million, a strong financial result that reflects growing Eversense 365 adoption in the U.S. and a focused reimbursement channel mix, which Rick will detail shortly. Equally important, gross margin reached 58%, driven by more new users, higher manufacturing volumes, and the structural benefit of eliminating the Ascensia revenue share. We view the combination of top-line growth and margin expansion as early validation that our integrated commercial model can deliver with improving financial performance as we scale.

Eversense sales have continued to grow, and we believe we remain on track to double patients this year in the U.S. Our direct-to-consumer channel continues to yield strong results. In 2025, DTC sourced new patient shipments doubled year-over-year. Within the year, our monthly DTC new patient volumes grew more than four-fold from January through December as we scaled our investment. That momentum carried into 2026. In Q1, DTC sourced new patient shipments grew nearly 100% compared to the first quarter of 2025, with DTC accounting for roughly 60% of all new patient shipments in the quarter.

The healthcare professional channel is also growing as our sales reps continue to become more efficient, with March providing the most HCP sales leads in the company's history. We're also encouraged that patient reorders tracked above plan in Q1, an early signal of the retention dynamics we expect from our year-long product. Following the positive reception of Eversense 365 in the U.S., we anticipate the current launch of our year-long sensor in Europe will support growth in these markets as well. In April, we inserted our first patients in Sweden, followed by Spain earlier this week. We're in the process of launching across Germany and Italy, rounding out the four European markets we'll be serving following the transition of Ascensia's commercial organization. We also see Eon Care as an increasingly important growth driver for Eversense.

Eon now has over 70 nurses available for insertions, and the team is well on its way towards our goal of 100 nurses by the end of the year. Critically, Eon Care now performs more than 1/3 of all Eversense insertion procedures. To put the reach of our broadening network in perspective, we have established Eon in 34 states and are continuing to grow its reach. This expansion across the country reduces geographic barriers that may have previously limited implantable CGM adoption. That reach is significant for several reasons. First, it means that we have built meaningful insertion capacity that is not dependent on individual physician practices. This lowers the barrier for prescribers to offer Eversense. Second, it gives patients a more convenient path to access the only year-long CGM, including in markets where inserting physician availability has historically been a constraint.

Third, it provides Senseonics with a scalable service infrastructure that grows alongside our patient base. We expect Eon Care's share of insertions to continue increasing over the rest of the year as we add more nurses and further expand geographic coverage. In addition, the availability of Eversense with our first automated insulin delivery platform will continue to support our growth. In February, we announced the integration of Sequel Med Tech's twiist insulin pump with Eversense 365, the first automated insulin delivery system to integrate with a year-long CGM. Not only does this integration expand the options available to people with diabetes, but it also provides a technology that fits the reality of their lives. Our efforts have brought two advanced platforms to users, this combining the precision of the twiist insulin delivery system with the unmatched longevity and performance of Eversense 365 in a flexible, convenient offering.

We continue to pursue additional opportunities to integrate Eversense with other pump platforms and are very encouraged by the early uptake of Eversense 365 as part of our first AID system. We've seen good early adoption with twiist. We've had exceptional anecdotal feedback from the initial users, and the data presented at ATTD puts early numbers to the positive impact this combination is having. I'd also encourage you to check out the data to be presented by our Chief Medical Officer, Dr. Francine Kaufman, at the ADA. This is further real-world evidence on Eversense 365, and the data shows a full year of strong patient adherence, glucometrics, and hypoglycemic outcomes. It also validates our sensor's performance and accuracy across an entire year, with the same performance between the first and second six-month periods.

Generally, we're very pleased with the progress we are making in advancing our penetration in the type 1 population. All of these areas of commercial progress are encouraging, and I look forward to continuing the exciting commercial momentum that is building. Significantly, this momentum is driven by the successful integration of the Ascensia commercial organization into Senseonics. As an update on this initiative, we brought the Ascensia U.S. CGM organization into Senseonics on January first, and that transition has gone smoothly, as evidenced by our first quarter performance. The U.S. territories are effectively running and showing progress. We appreciate the continuing commitment of our new colleagues, and we're enjoying building our capabilities with them directly as part of one aligned team. We've continued to collaborate with Ascensia to complete the OUS transition and build a dedicated European commercial team to execute launches in Germany, Italy, Spain, and Sweden.

As mentioned earlier, we are now live in Sweden and Spain, with Germany and Italy on track. As part of this, we have hired key additional roles to support those countries. We are working to finalize our business systems and to transfer the contracts, tenders, and employees to within the new Senseonics organization. We are planning to close the European transition this quarter. We've appreciated Ascensia's partnership over the past several years and their ongoing collaboration to make this transition smooth for both Eversense users, providers, and commercial employees. At the same time, we recognize the value of having the full view of the product life cycle inside Senseonics, being more equipped to drive operational strategies and having the control and agility to rapidly respond to market needs.

In addition, the full team is excited about being part of a single organization that is fully aligned and committed to building and growing the world's most advanced offering in continuous glucose monitoring. While we continue our focused work to drive awareness and adoption of Eversense 365 today, we're also excited about further shaping the future of CGM with our compelling product pipeline for tomorrow. We remain on schedule to launch Gemini in the first half of 2027 as we target delivering a one-year sensor with a battery for continuous and optional on-demand readings. Moreover, in the second half of the year, we plan to initiate the first in-human trial for Freedom, the one-year sensor with built-in Bluetooth that will connect directly to the user's phone and insulin pump without a transmitter.

We've also begun the important steps of building and scaling the manufacturing processes with our manufacturing partners as we advance towards the clinical trial and ultimate launch. Additionally, we're also working on enhancements to our Eversense 365 app. This is currently in development, and we expect that to launch later this year. The feedback that we've received during early testing has been positive, and we look forward to rolling out the app to advance our customers diabetes management decision-making, and we're excited about advanced AI features that will be added as well. Finally, I'd like to update you on our recent financing initiatives. Delivering on the value creation opportunity our shareholders have in Eversense requires us to have the growth capital to support these initiatives. To position us to execute on our strategies, we took two steps to substantially strengthen our balance sheet.

On Friday, we executed an amendment and expansion to our credit facility with Hercules Capital, increasing that facility from $100 million-$140 million. We have drawn an additional $20 million above the $35 million that was previously outstanding, and there are additional draws of up to $85 million available subject to various terms and conditions. Additionally, on Monday, we closed on a public offering, raising $92 million in gross proceeds through the sale of common stock and pre-funded warrants. As a result of these two financing steps, Senseonics is in a stronger position to build on the progress we are describing today. I'll now turn the call over to Rick to walk through the numbers.

Thanks, Tim. I'd like to begin today with an overview of our sales channels, reimbursement channels, and revenue recognition to help clarify the mechanics of our financials. Now that the sales and marketing team is fully integrated into the company, I think it is important to provide additional details on what you should expect over the course of 2026. Senseonics has three primary sales channels in the U.S.: direct-to-consumer, healthcare providers, and reorders. Direct-to-consumer sales is the largest U.S. sales channel and currently accounts for approximately 60% of our new patient growth. In the second half of 2025, we made the strategic decision to invest heavily in the channel and will spend a similar amount this year at approximately $13 million.

We learned a lot last year about effectively deploying and targeting this spending and have applied those learnings in 2026, resulting in lower cost per workable leads and higher conversion rates. Our second U.S. sales channel is healthcare providers targeted by our sales force. While HCP sales currently account for about 40% of new patient growth, this channel has the highest ROI due to repeat prescribers. In 2026, our sales forces continue to increase productivity, driving more and more new patient leads. We expect this trend to continue each quarter. Last, but critical to our business, is our patient reorders, which will continue to grow each year. We expect 40% of our U.S. volume to come from reorders in 2026 and are focused on continuing to improve patient retention.

I'll move to U.S. reimbursement channels and the mix of bundled pay versus durable medical equipment. In bundled pay, the insertion procedure and the Eversense 365 sensor are combined in a single payment. It is the most profitable reimbursement channel, with good support from our inside sales team, approximately 60% of our volume is now flowing through this channel. This contributed to the favorable margins we saw in Q1. The remainder of the volume continues to flow through our DME reimbursement channel. The DME channel is serviced by distributors with payer contracts, we recognize revenue upon shipment to the DME distributors. These distributors maintain appropriate levels of inventory, typically 30-days or less. We service the bundled pay channel primarily in two ways. First, through our consignment program, where participating physicians keep inventory on their shelves, so the product is readily available for patients.

Second, through EonCare, our wholly owned subsidiary that utilizes contracted nurses to perform the procedure once a patient has a prescription. In the bundled pay channel, we recognize revenue at the time of the procedure. With the integration of the commercial organization, we'll no longer be reporting sales to Ascensia, our reported revenue growth will more closely align with our patient-based growth. I hope these descriptions were helpful. Let's turn to the financials for the quarter. In the first quarter of 2026, net revenue grew 85% year-over-year to $11.7 million, compared to $6.3 million in the prior year period on the continued momentum of Eversense 365 new patient additions, retention rates slightly above plan, and more of our business transitioning into the more profitable bundled pay reimbursement channel.

U.S. revenue for the fourth quarter was $9.3 million, and revenue outside the U.S. was $2.4 million. In Q1 2026, gross profit was $6.9 million, an increase of $5.4 million from the prior year period. This increase in gross profit was primarily due to higher U.S. revenues driven by continued adoption of the Eversense 365 system, higher average selling prices as more of our business moves to the bundled pay channel, and a more streamlined manufacturing and supply chain contributing to improved margins. During the quarter, we recognized a one-time benefit of $0.5 million in cost of goods sold due to the utilization of raw materials for the continued commercialization of Eversense E3 outside of the U.S. Excluding this one-time benefit, gross profit margins would still be above plan at approximately 54%.

Research and development expenses in Q1 2026 were $8.6 million, an increase of $1.3 million compared to the prior year period. The increase was primarily due to new R&D projects, the ramp-up of new clinical trials, and increased headcount to support these activities. First quarter 2026 selling, general and administrative expenses were $30.2 million, an increase of $22.5 million compared to $7.7 million in the prior year period, primarily driven by the integration of the commercial organization, including increased personnel, transition support services from Ascensia, direct-to-consumer marketing, and other operational costs. Net loss was $32.3 million, or a $0.71 loss per share in the first quarter of 2026, compared to a net loss of $14.3 million, or a $0.40 loss per share in the first quarter of 2025.

Net loss increased by $18 million, primarily due to increased expenses resulting from the costs related to taking over the commercialization and distribution of Eversense. As of March 31st, 2026, cash, restricted cash, and cash equivalents totaled $64.6 million, and debt and accrued interest was $35.2 million. Q1 delivered. We're building on that momentum. We're raising our full year 2026 global net revenue guidance to $60 million-$64 million, compared to $58 million-$62 million previously. This updated revenue range represents notable year-over-year growth of 70%-82%. Our business is seasonal due to the resetting of patient deductibles at the beginning of the calendar year and heavier utilization of patient assistance programs at that time to offset out-of-pocket costs.

The seasonality of our business, the fact that we launched Eversense 365 in the fourth quarter of 2024, and the second half focus of our investments in DTC to drive awareness in the back half of 2025 contribute to our revenue being more heavily weighted to the back half of the year. We expect to see approximately 40% of the sales in the first half of the calendar year and 60% in the second half. Taking into consideration our margin performance to date, along with the planned launch of Eversense 365 in Europe, which will allow us to focus primarily on a single product globally, we now expect full year 2026 gross profit margin to be between 55% and 58%, increasing in the back half of the year.

We are excited by the financial results in Q1 driven by the integration of the commercial organization and expect to see continued improvements in our top line and the expansion of our gross profit margins. Due to the integration of the commercial organization and supporting transition service agreements from Ascensia, we expect operating expenses to be between $150 million and $160 million, with increases primarily in SG&A and a smaller increase in R&D for the Gemini pivotal trial. We expect cash utilization in 2026 to be between $110 million and $120 million, largely as a result of increasing SG&A due to bringing the sales and marketing teams in-house. Earlier this week, we completed an equity financing and expanded our debt facility with Hercules Capital, adding more than $100 million to our balance sheet.

We issued common stock and pre-funded warrants to institutional investors for gross proceeds of $92 million and drew an additional $20 million on our $140 million debt facility, bringing total debt outstanding to $55 million. We believe this is the right mix of debt and equity in our capital structure, and we believe we now have the financing in place to get us to the anticipated launch of the Freedom product in 2028. We're excited that our strengthened balance sheet will allow us to drive shareholder value by supporting the continued investment in Eversense 365 and future generation products while focusing on executing our commercial strategy. With that, I'll turn it back to Tim.

Thank you, Rick. To wrap up, I want to step back and frame where we stand. Senseonics entered 2026 with a clear thesis that bringing the commercial organization in-house, combined with the strength of the Eversense 365 product, would unlock revenue growth and margin improvement. The first quarter results support that thesis. $11.7 million in revenue, gross margins at 58%. DTC new patient shipments nearly doubling, and EonCare now performing more than 1/3 of all insertions. Patient reorders are tracking above plan. At the same time, our balance sheet is healthy. Our pipeline is advancing on schedule with Gemini targeted in the first half of 2027 and Freedom on track to enter its first human trial later this year. We have the organizational structure in place with a full U.S. team integrated.

The European transition is underway. EonCare is scaling. We believe Senseonics is positioned to become the company that reshapes continuous glucose monitoring. We intend to execute with the discipline and urgency that this opportunity demands. With the momentum that we are building across our commercial, development, and financial initiatives, we're optimistic about the remainder of 2026 and beyond. We look forward to speaking with many of you at our event during this year's American Diabetes Association conference in New Orleans. With that, I'll now turn the call over to the operator to answer any questions that you may have. Thanks once again for your time today. Operator, let's go ahead and open up the call for questions.

Thank you. At this time, if you would like to ask a question, please press star one on your telephone keypad. To withdraw yourself from the queue, you may press star two. Once again, to ask a question, please press star one. We'll take our first question from Anthony Petrone with Mizuho Group. Your line is open.

Thanks, congrats to the team here. Good afternoon. Maybe Tim and Brian, you know, sort of a two-part question here. Ascensia coming over in the U.S., you know, described as a seamless transition. Just wondering, though, as you know, sort of put them under a new corporate umbrella, is there any, like, lag as to what their contribution is gonna look like for turning on new sites, contributing to patient growth? It seems like there can be, you know, more of a tailwind that certainly as this year goes on, and then that follows through to the European experience. A follow-up here quickly would be on the cadence of investments. You're coming off the capital raise, debt and equity, investments in regions was a gating factor. DTC drives new patients.

You have the investment opportunity with the EonCare inserter. How do you look at the pace of investments? You know, where will they be focused kind of initially in the first half to the second half? How meaningful do you expect, you know, a conversion in new patient growth this year from the increased investments? Thanks.

Thanks, Anthony. In regards to the transition, I'll speak to that or at least introduce, then Brian can come in. It really has gone quite smooth, right? The sales reps were obviously, you know, we worked with them pretty extensively in the fourth quarter, made sure they had everything you need. You know, even simple things like keeping the exact same cell phone numbers, all of that happened. We pretty much flipped a switch on December 31st, they were calling on the same accounts, you know, really picked up everywhere that they should have. We haven't seen and don't anticipate any lag in regards to their efforts and capability. Brian, I don't know if you had any further qualification for that?

Yeah, Anthony, I'd probably add to that on the EU side, right, for our four European countries, we're moving from the BGM sales efforts to hiring sales reps to now take over those activities. If there's a lag, it's in our four EU countries, but as Tim said, the U.S. was fairly seamless.

Yeah, then Anthony, I'll cover the investment question. You know, we stuck to our original plan. Our original plan does call for an increase in DTC spend in the back half of the year from where it is in the first half, but still in that $13 million ballpark. We are certainly monitoring the sales force. We have 43 territories today with a plan to maintain that level and increase it next year and the following with our future generation product launches.

We'll take our next question from Josh Jennings with TD Cowen. Your line is open.

Hi, good afternoon. Thanks for taking the questions. Nice to see the strong momentum here in early part of 2026. Wanted to ask just about the stat about, you know, 60% of insertions are coming through the bundled pay channel, Tim and Rick. I mean, that's a, that's some nice, higher number than we were anticipating here in the early days of 1Q 2026 relative to, I think, where you exited in 2025. How do you see that mix evolving? Is that 60% kind of a steady state, or should we be thinking that that continues to move higher over the course of 2026 and into 2027, with it being kind of, I think, a higher revenue, higher margin channel?

Yeah, you're right. Historically, we've been about 50/50 DME and bundled pay. We certainly have focused some of our DTC spending and inside sales efforts on that bundled pay channel. We were pretty excited as that our channel mix moved to that channel being more profitable, which was a good piece of the reason we saw the upside in our margins. We're gonna keep focusing on that channel over the course of the year, but right now thinking that the 60/40 is an appropriate target.

Yeah, we are-

Okay.

As Rick's pointing out, we are, you know, Brian's team is doing a great job to reaching out to the folks that are on Medicare, which is a pretty good portion of that. We are also seeing some of the commercial payers transition to the bundled pay. Josh, I would expect that to transition, but over a couple of year time period. I don't think it's anything that'll happen precipitously in this year.

Thanks for the help thinking through that. Maybe a follow-up, just a two part pipeline question. The first part, just thinking about the data that hit at ATTD with the Sequel integration, and what will be put forward at ADA just on the performance for Eversense 365. There may be some other pump partners that are interested in integrating Eversense 365. Hear any updates on any partnership discussions? Also, just with the Freedom progress and getting into a human trial second half of this year, can you just help us think about how de-risked that program is? Are there any further steps that need to be taken before you guys can move into that trial? Just what boxes are left to be checked before that trial can kick off? Thanks for taking all the questions.

Sure, Josh. On the first part on the.

Data.

Yeah, sorry, the data with that Fran's gonna speak to. That's gonna be an extension of the work that she did. We now have a notably much larger population of the Sequel folks. We're seeing, you know, really encouraging results there. She did get an oral presentation. We'll also have a lot more extension of the Eversense 365 data. That'll certainly be encouraging, and we're looking forward to the results from that. On the pump partnership, we continue to be very active. We don't have anything to announce, but it is an important focus for us, and we're continuing to make progress. On Freedom?

Yeah. Hey, Josh. This is Mukul. On Freedom, we have been making a lot of progress. We are doing a second preclinical in animals. Now we think we are at a stage where we've taken the risk out of the product and take it into humans. The first in human, we'll be doing outside U.S. in a feasibility study. Then we'll bring the data over to start discussions with FDA to get a pivotal study IDE in by end of the year.

We'll take our next question from Matt Miksic with Barclays. Your line is open.

Great. Thanks so much for taking the questions, congrats on a really great quarter. You know, I had one question on just sort of like the retention of some of the folks using the system, and then one on the next gen technology platform power, you know, enhancements that you've made. It's a question that I get, you know, fairly often from investors. The first, you know, you've talked about sort of like the percentage of folks that will renew the first time, the second time, and the third time. I'm wondering now that you're a year and change in on Eversense 365, if you're seeing any changes in that or improvements in that? Just because I think that was like a six-month, you know, statistic before. Just wondering if that's changing at all, and then I have a quick follow-up.

Yeah. Well, obviously we don't, you know, we don't have the multi-sensors at this point, but we are encouraged. The historical has been, you know, first to second is around 75%, second to third is around 85%. By the time you get to your third sensor, it's well into the 90s. I think we're continuing on that track. We don't yet have the data, obviously, for the second year, but the first data is quite encouraging and frankly was a little bit stronger than we had modeled. We feel quite good about the experience we're seeing in the one-year sensor.

What was the question on the battery powering?

Yeah. He was going to ask the question to follow up.

Did you have a question on the battery, Matt?

Hi. Yeah, sorry about that. Yeah, I accidentally put myself back on mute. Yeah, just maybe talk about how to think about the sort of level of work that you've done so far on sort of the next-gen battery platform, what the maybe the technology risk is to that or the manufacturing risk or, you know, how to frame that just given that, you know, it's the next big thing in the pipeline. Thanks.

Sure, Matt. The battery comes from Integer, right? That they're pretty much the only manufacturer of implantable battery for all medical devices. There's no technological risk. The chemistry we are using is very well known in the cardiac and neuromodulation devices used over two-decades. And all those choices were made just to make sure that the risk is low. FDA knows that company pretty well. For Gemini, we have already attached the battery. We already have it in clinical study, so there is no technical risk left in Gemini. Going beyond the battery is the Bluetooth that comes new to Freedom, and we have made a lot of progress there. As we have stated earlier, we are ready to go into humans to kind of start collecting data while we continue to refine the Bluetooth technology in that really small form factor.

Thanks so much.

You're welcome.

We'll move next to Sean Lee with H.C. Wainwright. Your line is open.

Hey, good afternoon, guys, thanks for taking my questions. In the prepared remarks, you mentioned that DTC is becoming an increasing larger piece of the new patient ads. I was wondering, have you seen any changes in the cost per patient ad through this channel of pre and post the Ascensia transition? What point do you think we can get to once it's fully ramped up?

Yeah, sure, Sean. I'll take that. I think if you remember the back half of 2025, we made significant investment in DTC. Certainly, drove increased awareness of our product. Those cost per workable leads were higher. It did become a little bit less efficient. In 2026, what we did is take the same amount of spend that we spent in the back half of 2025 and spread it all year long. Although we're making smaller investments on a monthly basis, we're seeing improvements in both cost per workable lead and in our conversion rates. We've learned a lot with that investment we made in the back half of the year and are certainly tweaking algorithms and spend levels to make sure that it's extremely efficient. We're pretty happy with the progress we've made so far in Q1.

Great. Great to hear that. With the competition that, you know, Dexcom and others are coming up with these long next gen short durations, again, how do you defend the value proposition of Eversense 365 versus these, you know, other sensors that are coming in and potentially lower price points?

The value proposition for Eversense continues to be the same. They have, you know, they have made some changes from 14 to 15-days, obviously that's significantly different than a year-long sensor. The primary premise, of course, for a person with diabetes is they'd like to think less about their diabetes technology and more about the rest of their life. As, as we manufacturers can make it simpler and easier to use, they will reward you for the purchase of a quality product. Eversense certainly fits that bill. A year long of not having to think about a sensor change is really very attractive to people, and that's why we're seeing the growing penetration that we're seeing.

Good. Thanks again for taking my questions. That's all I have.

Once more, that is star one for your questions. We'll move next to Ben Haynor with Lake Street Capital Markets. Your line is open.

Good afternoon, gentlemen. Thanks for taking the questions. First off for me, just thinking about some of that data that you presented at the ATTD conference on the first 5,355 patients. You know, you had really good time in range, really good GMI. It looked better than what a lot of competitors have published, both on the CGM and CGM plus pump side. Can you talk about whether that got much attention or, you know, any color on how that was received at that conference?

Yeah. We've actually received quite nice feedback from it. I think, you know, one of the things is we'll have an extension on that at the ADA that I think will get further coverage. We're also, Ben, in the process of getting that peer-reviewed, written up and peer-reviewed. That's really the next big step for us to get further visibility of it. I would hope that, you know, later this summer, we'll have a peer-reviewed publication that'll, you know, that'll strengthen the publication and rollout of that information. The feedback certainly has been positive. You know, as we've pointed out, we feel very comfortable. You get the long-term compliance, obviously, of Eversense at 365-days. The algorithm, the loop algorithm, has some pretty attractive attributes and is performing pretty well.

When you put those together with a high-precision pump like you get out of Sequel, you get those very good results.

You know, I guess this kind of dovetails with one of Josh's questions. On that, the data that was with the first 100 or whatever it was Sequel pump users was. Does that help the level of attention and maybe get some of the other potential pump partners across the finish line, or is that, you know, not enough patients yet? How's the right way to think about that?

I mean, it's definitely, you know, it's definitely helping, you know, with the partnership. Brian, you wanna speak to that? Your team is spending a lot of time working with them, so.

Yeah. I think both the success we've had in the first couple months of the combined system has opened some eyes and exceeded our expectations. Clearly the data was good, both on the sensor and the pump. Anytime you can show that data in real life now, it substantiates a whole lot. It just helps a lot of conversations, Ben. Very happy with it. Yes, it's helping the conversations move forward.

Great. That's all I had, gentlemen. Thanks. Thanks for taking the questions and congrats on the quarter.

Thanks, Ben.

Thanks.

This does conclude the Q&A portion of today's event. I would now like to turn back to CEO Tim Goodnow for any additional or closing remarks.

I'd like to thank everybody for participating, and we look forward to updating you next quarter. With that, we'll go ahead and end the call. Thank you.

Thank you. This brings us to the end of today's meeting. We appreciate your time and participation. You may now disconnect.